Former public works head bought property across the road from a potential commercial development in Sea Point on land that had been slated for affordable housing
An adviser to Western Cape Premier Helen Zille is in the middle of a potential R190 million conflict of interest debacle.
The official, Gary Fisher, laid the foundations for the provincial government’s commercial development of land previously slated for affordable housing, then his company snapped up property across the road.
Now the value of that investment is set to be boosted if the province’s controversial plan goes ahead.
The land is the former Tafelberg School in Sea Point, which the province sold for R135 million in January, sparking an activist campaign for it to be used for social housing.
Lobby groups Ndifuna Ukwazi and Reclaim the City sued to stop the sale, but they settled the suit when Zille agreed to halt the transfer and reopen the public comment process.
Fisher was deputy director-general in charge of public works within the provincial department of transport and public works from 2011 to 2014.
He is also a successful property investor who became a shareholder and director of the property group CapitalGro while he headed public works. He said he declared this.
As an official, he put the finishing touches to the opening of Tafelberg to private, commercial proposals – while his CapitalGro bought a R95 million building nearby and a second R97 million property directly across the street shortly after he left office.
Fisher said he played no role in these investment decisions.
Fisher’s earlier role as both player and referee could undermine the province’s position that it acted in the best interests of its citizens in packaging Tafelberg for market.
Department of transport and public works head, Jacqui Gooch, told amaBhungane: “Fisher completed his declaration of interests in accordance with the legislated requirements.”
He went on to become Zille’s adviser on urban regeneration in June 2014, while CapitalGro set about buying more commercial property across the city.
For Zille, at least, this raised red flags. She told amaBhungane she learnt of Fisher’s interests only after he became her adviser. She took legal advice, and circumscribed his role to just one project – “after ascertaining that he had no private interests anywhere near the site” – to avoid a conflict of interest.
Debate over the future of Tafelberg began in 2011 when the department made known its intention to release it for private development.
The site represented a revenue-generating opportunity for the province, a chance to provide affordable housing, or a mix of these. The provincial department of human settlements made a strong case for affordable housing.
In a March 2013 letter to public works – then under Fisher’s leadership – human settlements head Mbulelo Tshangana wrote: “Very limited opportunities exist for persons in the income bracket R1 500 to R7 500 to own property anywhere close to the city centre, where they may work or go to school.
“If ownership is a distant possibility for many Capetonians, it critically highlights the need for government to develop affordable, higher-density, rental housing opportunities in this area.”
He argued this was a never-to-be-repeated opportunity: “Cape Town is one of the most segregated cities in the world. With this in mind, land cost is so significant in the province that we could not afford to purchase market-related land that offered even slightly similar opportunities to this one.
“Were these portions of land to be disposed of, the opportunity cost for integration within the borders of the city could potentially be lost to us forever.”
He requested that public works transfer Tafelberg to human settlements or the City of Cape Town for rental housing.
In an affidavit in the activists’ court application, National Association of Social Housing Organisations (Nasho) head Malcolm McCarthy said: “To the best of my knowledge, [transport and public works] did not at any point engage [human settlements] in a serious discussion about how Tafelberg, or the other sites, could be used for social housing.”
Nasho and a number of social housing institutions also took up the case for social housing.
It also commissioned a feasibility study, which presented a business case for social housing at Tafelberg and a site in Woodstock.
According to McCarthy’s affidavit, the housing groups offered to help public works develop a method to fairly assess the “social development” value of proposals.
He said: “This was never pursued by the [department].”
Fisher distanced himself from the decision to sell: “One of my last acts before leaving the [department] in April 2014 was to initiate an expression of interest [EOI] process on the aforementioned sites, which typically allows for comment from the market to shape the project feasibilities.
“Following my departure, I had no involvement whatsoever in any of the sites, and I was not privy to the outcome of the EOI, nor was I part of or aware of the decision to sell Tafelberg School and the subsequent tender process.”
The request for EOI is a 50-page document setting out “development and investment opportunities” of four properties, including Tafelberg, “identified as constituting the most immediate market opportunity and being currently best suited for packaging to the market”.
Fisher also disputed claims that the document was biased against social housing: “The EOI did not exclude a social housing component or development.
“The fact is that Communicare [a social housing institution] responded to it by presenting a social housing option, which belies this assertion.”
McCarthy said: “If you are going to dispose of government land with the intent of social development, there has to be a way in which you create a balance between the actual capital returns you are going to get, and there must be a way of fairly adjudicating that against criteria, and there was none of that in this call for proposals.”
However, CapitalGro bought the first building, the Regent, five months before Fisher initiated the EOI. It bought the Equinox, directly across the street from Tafelberg, seven months after it.
Fisher insisted he did not initiate the deals: “I was not involved in the Regent transaction whatsoever. When the opportunity to purchase the Equinox arose, as presented to us by the vendor from whom the company had bought the Regent, I recused myself from the investment decision.”
After Zille agreed in May to halt the sale and reopen the public comments process, the department received an extraordinary 5 000 submissions, which are now being considered.
Zille said: “A decision on the Tafelberg property by Cabinet is still pending, and will be informed by the public submissions and our constitutional responsibility to balance our various mandates.
“I reject outright any assertion that the decision will not be taken on this basis.”